Growth strategies are a set of rules and norms you select in the course of a business to attain flexibility and achieve your goal. These strategies are numerous and are developed and differentiated by every business. It is very important to understand what exactly your business needs and where do you want to grow. Clarity is the epitome of growth strategy. If you do not have clarity, your growth is going to be hindered by your processes. So let us check out the growth strategies which can be fruitful for you.
Internal growth strategies
Intensive growth strategy
This strategy is involved understanding your existing panels of command and improving them to attain the most out of everything. This strategy includes market development strategy, product development strategy, and organizational environmental growth strategy. All of this requires intensive research and explicable. The clarity in the sector you are in. Understanding the requirements of the sector so that you fulfill the need and want paradigm.
Integrative growth strategy
This strategy is associated with maximizing the sales and assets and revenue of the company. The list includes three major tools, Horizontal integration, Vertical integration, and Forward integration. All of these integrations are carried out In every nook and cranny of the company too. Optimize the process they are working in and maximize the output in terms of revenue, assets, sales, and overall management.
Diversification growth strategy
As the name suggests, this whole strategy is concerned with entering a new market where the company hasn’t been performing yet. This not only considers studies of the market that they are going to enter but also they studied their capability of performing in the newest segment and the product they’re introducing to the new market.
External Growth Strategies
Merger
As the name suggests, this act means two companies coming together to form a new company, or they are getting combined where only one company will survive further. A merger happens by consolidation or absorption. The book definition of a merger is Two or more companies coming together in an exchange of securities where either there is a new company or only one company will survive. The merger can happen due to anything, but generally, they’re done with Strategic, Organizational and financial motives To ensure the advancement of the company and ultimate growth.
Take over
It loosely translates to the acquisition of equity of a company to the extent that the acquirer will have control over the general affairs of the company. While the main aim is to take over the legal control, until the merger takes place, the company that has been taken over always has a separate entity from the acquirer. There are many kinds of the takeover, namely Friendly takeovers where the taking over is being consented to by a majority of the share and stakeholders.
Hostile takeovers are termed where a person has a motive to obtain legal control of the company, purchases the required number of equity from noncontrolling shareholders in the market, and gains the legal control of the said company.
Bailout takeovers are one where the company is not able to continue its operation and is almost sick to carry on the operations. The company rehabilitates itself as per the schemes of financial institutions and that is how the takeover happens.
Joint venture
Suggestive by name, here typically two or more ventures.Coming together under a contract that establishes joint control and operations. The biggest examples of joint ventures were Marty Suzuki, Hero, and Honda. A joint venture can be an extremely beneficial growth strategy, as the other company may have a very big capitalization in the market, which by your input can increase in your area so that you can use the goodwill of the other company, as well as their clientele, will be loyal to the brand.
These were the two forms of growth strategies. They are which are very basic in nature. A company may go for any or more upcoming strategies that can be tailored to their own needs. That is how growth can be promoted by thorough and intelligent research and application.